Two common deal-breaker clauses that owners like to insert in contracts
- Indemnity clauses to defend client against all claims
- Guarantees/Warranties/Certification clauses of things or work beyond firm’s control
Five Most Common Fee Structures
- Lump Sum/Fixed Price
- Time and Materials (T&M)
- Time and Materials with a Maximum-Not-To-Exceed
- Cost Plus Fixed Fee
- Cost Plus Fixed Fee with a Guaranteed Maximum Price (GMP)
Three Resolution Techniques commonly used in design contracts
Partnering
Mediation
Arbitration
Five Phases of Project Management
- Start - the project begins
- Planning - figuring out how to perform the work
- Design - the project’s overall design is worked out
- Production - preparation of construction documents and/or other deliverables based on the overall design
- Closeout - the project work is completed
Six Activities of Project Management
- Defining
- Planning
- Directing
- Coordinating
- Monitoring
- Learning
Six Goals of Project Management
To reach the end…
1. Of the project
2. On budget
3. On time
4. Safely
5. As error-free as possible
6. Meeting everyone’s expectations
Four basic organizational structures for design firms
- Sole proprietorship
- Design studios
- Multiple design studio organizations
- Matrix organizations
Main Must-Haves of a Good Project Manager
- High motivation to manage
- Ethical and professional behavior
- Technical and legal competency
- Pragmatic decision-making skills
- Ability to make decisions with incomplete information
- A generalist’s experience, education, and attitude
- Good communication skills
- Ability to empower a design team
Highly motivated managers share …
- Favorable attitude toward authority
- Desire to compete
- Desire to exercise power
- Desire for a distinctive position
- A sense of responsibility
Code of Ethics for Project Managers
- general public is ultimate client. Hold their health, safety, and welfare in the highest regard
- PMs must know their personal strengths are areas of competency. Know firm’s areas of expertise and only provide services within expertise and competency
- Always behave in a way that honors dignity of design professions
- Never allow themselves or firms to become entangled with other persons or businesses that are engaged in deceitful or fraudulent practices
- Only stamp and sign drawings, specifications, reports, or other documents that were prepared under their direct supervision
- Frontline representatives to their firm. They must act faithful, trustworthy, and honest agents of their firms.
- Constantly strive to improve their professional skills and better their profession
- Must not accept commissions, monies, perks, or favors from contractors or other parties that have dealings with mutual clients
When to Use or Not Use Email
Use Email:
- Confirm recent discussion or decision that took place orally between PM and receiver. In email, PM requests confirmation from receiver.
- Communicate simple, clear-cut factual information that requires no feedback from receiver to understand message.
- Transmit lengthy documents as attachments to the email (reports, drawings, memos, RFPs, etc.)
Do Not Use:
- In lieu of decision-making and/or brainstorming meetings that require direct interaction and simultaneous participation by many individuals
- To share important, complicated information that may require follow-up questions before the receiver fully understands the message
Six Objectives of the Project Work Plan
- Definition of the project objectives
- Identification of the project team
- Breakdown of the project into task budgets
- Development of the project schedule
- Establishment of the project quality-control program
- Identification of other project-specific procedures and standards
Three Elements of a Task
- An objective (measurable outcome)
- A duration (time budgeted)
- A level of effort (hours budgeted)
Characteristics of good Work Breakdown Structure (WBS)
- Developed iteratively, starting with whole and getting more detailed with each pass. Hierarchical - component parts relate to each other in terms of importance
- Right amount of detail
- Tasks defined by objective, duration, and level of effort. Based on relevant project experience in project management and design.
Strategies to Control Risk
- Prevention - reduce # of uncertainties/threats
- Transference - make other party responsible of threats
- Mitigation - lessen impact of threats should they occur
- Contingency planning - Plan in advance for coping with threats should they happen
- Assumption - identify the uncertainties or threats and accept their potential impact on project because of cost of prevention/mitigation/transference/contingency planning are greater than possible impact
Risk Management Strategies
- Use standardized contract forms whenever possible
- Understand the provisions of the contract
- Avoid contract language that increases risk
- Avoid unacceptable risks
- Use fee types appropriate for services provided
- Provide more comprehensive services
- Identify excluded as well as included services
- Specify how disputes will be resolved
Non-contract related:
9. Inform client of potential risks
10. Choose consultants carefully
11. Do not start production of contract documents until the design is well defined and approved by the client.
12. Avoid running projects without budget and schedule contingencies
Contract Words To Avoid Because They Increase Risk
Certify, ensure, guarantee, insure, maximize, optimize, and supervise
Deal-Breaker Clauses
- Indemnity clauses that require the design firm to indemnify (assure, underwrite, hold harmless) and defend the owner against all claims, not just those caused by the design firm’s negligence
- Guarantees, warranties, or certification clauses that require the design firm to guarantee, warrant, or certify things and work that are beyond the firm’s control
Lump Sum (Fixed Price)
CPM
Critical Path Method
The method of project scheduling that graphically shows dependent, interconnected, and related activities or tasks including the critical sequence of tasks, called the critical path, that must take place on schedule if the overall project is to stay on schedule.
PERT
Program Evaluation and Review Technique
A work diagramming system that uses statistics to determine the probabilities of task durations.
WBS
Work Breakdown Structure
A project planning tool that divides a project into hierarchical tasks. The highest level or most broad based tasks are identified first. Each of these broad-bases tasks is then further broken down into more specific tasks. Each of these more specific tasks is then broken down until the level of detail necessary to properly control the work is achieved.
VE
Value Engineering
A review and analysis of the design of an architectural, engineering, or planning project by a third-party team of experts with the mission of improving the design’s performance, reliability, quality, safety, and life cycle costs
T&M
Time and Materials
A type of contract with which the design firm is paid for its labor (time) costs and its other direct costs (materials). T&M contracts do not have maximum dollar amounts.
